Taxation as important tools of State regulation and economic and social development, has been the realization of economic structural adjustment and transition has a unique role in areas such as economic development pattern. Since the 1994 tax reform, introduced and implemented a series of preferential tax policies for promoting progress in science and technology, to increase investment in research and development, development of high technology and industrialization, enhance the ability of independent innovation and core competence of enterprises, have played a positive role in promoting. Existing tax promote technology innovation of incentive role main performance in following two a aspects: a is through tax legal regulations promote technology development and independent innovation, as on directly for scientific research, and science test and teaching of import instrument device exemption VAT, on agricultural tractor-ploughing and the related training exemption business tax, on provides proprietary technology made of Chartered right using fee relief foreign enterprise income tax, on province (Department) level above units issued of technology bonus exemption personal income tax,. Second, to draw up specific tax preferential policies in a timely manner, on research and development-technology transfer-different aspects such as industrialization, development zones and other specific areas, as well as integrated circuits, software, the restructuring of scientific research institutions, scientific entities such as universal, or product support to promoting technological renovation, developing high technology and promoting the reform of science and technology.
　　According to preliminary statistics, existing tax total on high, and economic and technological development zone, 21 class special regional implemented has difference treat of tax offers policy, to adaptation reform and opening up and China economic gradient development and promote regional economic revitalization of need, as: on including Central 6 province of 26 a old industrial base city of eight large industry implemented consumption type VAT reform pilot, and unified on development costs income tax Qian plus meter deduction, and implemented enterprise modification device investment credits released income tax, and technology results transformation exemption related tax, and within foreign project investment total within import device duty-free, and import science and education supplies duty-free, and high area within high-tech enterprise and the software and IC industry implemented tax exemption and reduction, and on technology innovation and science universal tax exemption and reduction,. Incomplete statistics, in 2003, only for tax breaks on up to $ 25 billion in high-tech enterprises, 2004 technology together reach more than 70 billion dollars of tax relief. Current tax legislation and specific tax policies effectively improving the enthusiasm and initiative of enterprises technology innovation, give full play to the high-tech Park area of radiation, and platform-specific role.

　　Still exist in current policy issues

　　Operation analysis of the current tax system, the existing tax policy for promoting progress in science and technology there are some problems to be solved.

　　Regional offers large, level, relatively weak industrial concessions and orientation is not clear enough. Currently, 21 kinds of wide range of regional tax preference policies, content-rich, though also reflected on the high tech industry support, but industry tax breaks too much emphasis on the adjustment of profits, particularly regional tax preference policies for Pratt and Whitney has weakened to a certain extent encourages high-tech industry development-oriented features.

　　Tax incentives for more emphasis on innovation results rather than support the innovation process, the impact of the effect of tax policy. Such as: Enterprise has been recognized as high-tech enterprises or research and development to form when the transfer of scientific and technological achievements, to enjoy relevant preferential policies; accelerated depreciation, investment credits and other indirect preferential tax policies to support the industrialization of science and technology subject to different factors cannot be fully implemented;, tax credits and other factors of restricting the jurisdiction of residents, foreign-invested enterprises enjoy preferential tax part of the revenue in developed countries.

　　Lack of systemic tax supporting policy, subject to further improve the policy effects. Existing preferential tax policies for promoting scientific and technological progress scattered in almost all taxes of the current tax system, but will have certain conditions, such as high-tech enterprises in high-tech zone are inconsistent with the district tax treatment for foreign enterprises, affecting fair competition in the enterprise. On sci-tech enterprises to take VAT and import link tax preferential policies, the impact of the VAT system specification, there are also issues such as alternative investments and financial expenditure, offside seriously. On basic research, venture capital, the combination of science and technology, such as tax concessions to support is not enough, there is a lack of certain phenomena. Especially the part of the implementation of preferential tax policies needed for identification and management of concessions subject to the competent authorities, there is a policy of “game”.

　　Taxation policy

　　Practice shows that economic development, high-tech achievement transformation and its application, the introduction of equipment and technology, increase investment in research and development expenses, are the core market players enhance competitiveness, the pursuit of cost of high yields, should play its fundamental role of market mechanism, the Government cannot substitute for enterprise marketing decision making. Tax support policy is to encourage enterprises to develop high technology, “Introduction”, focusing on tax environment to create fair of innovation for enterprises.

　　Reform and perfect the main, enhancing adaptability of VAT and income tax on high-tech industry development.

　　Actively promote the reform of the VAT transition, allow businesses input tax deduction machine equipment is purchased fixed assets, not only in the further elimination of double taxation to encourage investment in enterprise technology and equipment, to promote industrial restructuring and technological upgrading, improving the international competitiveness of the product. Can also alleviate the tax burden on enterprises, encourage businesses to increase investment in science and technology innovation. Current should seriously sum up the VAT transformation of old industrial base in Northeast and central part of the city of pilot experience, pay close attention to the overall macroeconomic situation, further improve the national implementation of the reform of the VAT transition programme, when the conditions are ripe, uniform application of VAT transformation on a national scale reform. And new of enterprise income tax method and the proposed in the of enterprise income tax method implementation Ordinance will on existing enterprise income tax tax Qian deduction policy be specification, on high-tech enterprise implemented 15% of income tax low rates, to full reflected enterprise development hi-tech on labor, and capital and technology compensation of need, in desalination regional income tax offers policy of while, strengthening to industry offers mainly, and auxiliary to regional offers and balance social development of income tax offers policy system, promote high-tech industry development, and encourages enterprise development and increased resources energy savings using. Due to the high-tech Park, the main gathering funds, technology-intensive enterprises, therefore, high-tech industries will be the main beneficiaries of the reform of enterprise income tax and VAT.
Standardizing tax policies to promote technological innovation and economic growth.

　　High-tech industrial development and Enterprise technological progress involves wide, enterprise development, equipment updates, venture capital and technology incubator, University of science and technology parks provide necessary tax concessions, to fundamentally enhance the digestion and absorption ability of independent innovation of enterprises and promote “high precision, advanced” technology application and optimization of industrial structure upgrade,. Better reflect the guiding role of the tax on high-tech industry development. Under the State Council on the State’s medium and long-term development of science and technology program (2006-2010) and the State Council on printing and issuing the implementation < national long-term scientific and technological development plan (2006-2010) > the spirit of the relevant provisions of the notice of several supporting policies, relevant departments of the Ministry of research has developed a specific tax policy of promoting high-tech industry development, promote fair competition and technical innovation in enterprises.

　　One is the active use of indirect free, promote scientific and technological progress. As: reference international experience, used accelerated depreciation, and investment credits, and losses cover, and costs deduction, multiple way, will Enterprise meter tax wage tax Qian deduction limit unified improve to per capita monthly 1600 Yuan; on Enterprise year of development costs expenditures implemented 150% of income tax Qian plus meter deduction, insufficient arrived buckle part can in yihou 5 years within closing arrived buckle; on Enterprise year extraction and actual using of workers education funding by meter tax total wages of 2.5% implemented enterprise income tax tax Qian deduction; on Enterprise for research development of instrument and device, units value in 300,000 yuan following of, can once or min times meter into cost costs, units value over 300,000 yuan of implemented double balance decline method or years number sum method, accelerated depreciation measures, further reduce has enterprise technology innovation of cost, effective to incentive has hi-tech enterprise for of technology innovation activities.

　　Second, to further improve the preferential tax policies for promoting high-tech enterprises. Since January 1, 2006, national development zones for new founded in high-tech enterprise, within two years from the year of profit since exemption of corporate income tax, after the expiry of tax exemption enterprise income tax levied at a rate of 15%. Also, the animation industry in their efforts to study, information services, and outsourcing, tax support measures promoting the development of modern service industry.

　　Third, tax policy to guide social funds to support and develop high technology industries, enterprises and products. Preferential tax policies can reduce the cost of innovation activities, increase enterprises investment income, so as to increase the capacities of investment and innovation activities of enterprises, can also guide social capital investments in small and medium high-tech enterprise, ease the financing difficulty of small and medium enterprises, innovation is difficult, and so on. Existing tax policy provisions, on enterprises through public of social groups and State organs to technology type SMEs Technology Innovation Fund of donation, enterprise in annual enterprise income tax should tax proceeds amount 3% within of part, personal in declared personal income tax should tax proceeds amount 30% within of part, granted in calculation pay income tax tax Qian deduction; on venture investment enterprise take equity investment way investment Yu not listed small high-tech enterprise 2 years above can by its on small high-tech enterprise investment of 70% arrived buckle the venture investment enterprise of should tax proceeds amount.

　　Four are improving tax policies to encourage scientific and technological achievement transformation. Further perfecting the preferential tax policies of sci-tech intermediary service organizations, the State imposed on eligible incubator, University Science Park 3 year exemption of business tax, property tax and urban land use tax policy; conditions meet nonprofit incubator, University Science Park of uniform implementation of the new enterprise income tax preferential policies.

China, like many countries in the world, the threshold of aging society. Older products and supporting services development is still in “childhood”, the market is huge, urgent development; and bring profits to investors is huge. Who will “old market” a cup of soup? China’s “industry in the elderly” has just started, according to data provided by the National Committee of China, Chinese elderly currently supplies the market demand for the $ 400 billion by 2010 will amount to 10 trillion yuan, national product less than 10% for the elderly at the current stage, away from the huge market demand gap. But with China’s sustained economic and social development, various factors will be “industry in the elderly” flourish more powerful impetus.

　　China has become the world’s most populous country in the elderly, elderly aged over 60 had reached 1. 3.4 billion, and is exploding at a rate of 3% per year. Meanwhile, the purchasing power sum of the elderly in China can be substantial. China aging industry market potential spending power as much as $ 300 billion a year. “Old” broad prospects for a bright future.
　 According to the survey of China Research Center on Aging, city in the elderly with 42. 8% who have deposits. Currently retired gold, reemployment of elderly income each year, friends and relatives of the financing of up to $ 300 billion to 400 billion dollars, which will make old market in the future in different trades have a greater impact of the consumer market.
　　In addition, with the development of the economy, the income of the elderly is growing trend. Experts forecast that pensions alone by 2010 would be increased to $ 838.3 billion, $ per cent in 2020, $ 2030 per cent. National Social Security Fund Council Chairman Xiang Huaicheng said, Census and the population research center forecast data display, 2030 before and after, China 60 aged above of ageing population is expected will increased to 400 million around, equivalent now EU 15 country of population sum; to 2050, China 60 aged and 65 aged above of ageing population total will respectively reached 450 million and 335 million, this means was each 3 a people on has 1 a elderly.
　According to data provided by the National Committee of China, currently supplies the market demand of the elderly to $ 400 billion in China (only the garments wearing the consumption potential of the elderly each year there are at least $ 100 billion), will reach $ 10 trillion by 2010, national product less than 10% for the elderly at the current stage, considerably off the market demand.
In recent years, increasingly obvious tendency of ageing in Chinese society, have aroused the concern of all parties concerned. Deputy Li bengong, Director of the Office of the National Committee on ageing, elderly aged over 60 in China in late 2004 to 143 million, 2051 reaches the maximum value of 437 million, will remain after the 300 million or 400 million of scale.　Total to 2100 is still up to 318 million, total population of 31.09%, “population ageing will accompany the 21st century is always”. Now while still in the labor force in China golden age, but the population aged over 60 more than 14%, over 10% people over 65 years old, according to the standards of the international community, has stepped into the threshold of the ageing society. Last May, the World Bank released a research report on China’s future pension payments gap. Report states that under certain assumptions, according to the mode of the current system, in 2001 to 2075, budget gaps of basic endowment insurance in China will be up to $ 9.15 trillion. In addition, many scholars believe that ageing from different perspectives to Chinese pressure and challenges to the community.
　　Aging society while bringing new problems and challenges to China, but in some ways, population ageing will bring new opportunities for our development, opportunity is one of the largest elderly population consumption brought about by the industrial development opportunities. In some developed countries, older people become the focus of the market, “old” has become the darling of the market, it was considered “human children were found in the 18th century, 19th century women were found, discovered in 20th century the old man”. China’s “industry in the elderly” will also have broad development prospects, some experts even pointed out that “elderly industry” will constitute a 21st century together with the automotive, real estate and other industries “top ten most profitable trade”.
Although the “old” market potential, but the market is not equal to high return, businesses are naturally not neglected industry risks. In addition to the problem of the recovery period, a senile market also taking into account the investment competition, competition from the environment to a competing service, then to secure the support of Government policy, there is a continuous process of improvement. Apartment for the old if developing countries are to reach full maturity, there are special problems to solve. Social security, health care and pension systems is relatively less developed countries mature, commodity market in aged care market is greater than the risk of old age in developing countries. But the developing countries to international markets, such as for European countries to provide domestic services and nursing personnel.
　　At present, China’s “old” greatest constraints is weaker consumption ability in the elderly. Because the elderly are basically rural children, maintenance, status and consumption have no independent economic freedom. For this stage of city elder people, working at the stage of economically backward in China during the period, do not have adequate savings is basically living on pension maintenance and low standards of pension in China at present, in most areas only able to maintain basic living consumption capacity is limited. But as China’s rapid economic development, pensions for the elderly will continue to increase, and spending power will significantly enhance the economic strength of the elderly. Projections indicate that, by 2010, China’s total amount of pensions for the elderly will reach 838.3 billion yuan; 2.8145 trillion by 2020 will reach $; by 2030 will be increased to $ 7.3219 trillion. Moreover, with the development of the economy, older people will also increase the amount of savings, for example, Japan accounted for 17% of the total population of older persons, while savings deposits is 55% per cent of the total amount of savings.


　　Now China’s most experienced a difficult period in the history of the elderly, very frugal life, unwilling to consumption outside of the necessities of life. And as the ageing of the population of the new generation, their independent consumption growing, more and more old people will no longer be stuck “can eat clothing line” concept, more willing to pay for their own health and entertainment expenditures costs of old fashion, health, entertainment and leisure products in the market demand will grow as well.
　　It should be noted that consumer grade will continue to increase in the elderly. Now middle aged to higher income groups in society have different consumption characteristics than the previous generation, their consumption is the pursuit of taste and quality of life, auto, travel, residence, fitness market development mainly relies on their support. With the gradual ageing of the population, to increase the overall Chinese elderly consumer tastes, promoted “elderly” grades within the range of products and services, will also help promote the “elderly” developed rapidly.
　　Of course, the “elderly” should not merely an industry to promote economic growth, should also play to improve the quality of life of older persons, ensure their physical and mental health of an important social function. In particular, which is of great social significance, but difficult to profit and attract investment for industry, the Government should actively guide and encourage social investment to enter, with ease the impact of ageing on social pressure of industrial development.
With continual improvement in people’s living standards and life style of the elderly progress, Chinese intelligence, humanity and objects of old products and services-related growing demand in the market, developed to adapt “family of the elderly”, is a great prospect. Currently, 8 types of industry development.
　　One, the old institutions at their own expense. Marketization and modernization, urbanization prompted the family to narrow, difficult family care of the elderly. The economic situation of the elderly is better than before, an Yang institutions at their own expense of the elderly, has become the new darling of the elderly.
　　Second, older persons in department stores. Currently buying their own life, and medical supplies for the elderly, always running good morning several stores, is on the market needs some private shopping centers for the elderly, provide daily needs of a variety of clothing, food, housing, transportation, music, health care equipment and supplies, these things require some special material design and production, to meet the needs, the elderly in mind.

Three, the old convalescent institution (rehabilitation). Need for paralysis, in bed, and other chronic diseases, built in line with modern facilities, a small sanatorium facilities (rehabilitation facilities), and current social needs of older persons. Such organizations need for physicians, nurses, staff and community workers, provide life, health, care and community services, health, and funerals are required to complete.
　　Four, old restaurant. Because of poor elderly General taste, dietary tastes and digestive tract are not as young, middle aged food formula formula adjustments are required for its physiological, if it can be for these factors to provide catering services, would have been “old family” ‘s affection.
　　Five middle-aged and elderly services. As old consultant company, in health and rehabilitation centre, dating services, recreational and tourism services, vocational training and employment services.
　　Six-and special-purpose auxiliary equipment industry for the elderly. For example, elderly special bed, bath, shower, toilet, urinal, thermal batteries, desk, telephone, electric wheelchair, massage equipment and so on.
　　Seven, financing, insurance services. After retirement, entirely dependent on the old-age pension, days may have a relatively hard, it is better to buy life insurance in the middle age period, when aged, elderly life insurance amount subsidies could be received on a regular basis is inadequate. Insurance companies can carry out a number of insurance business, such as medical, accident and old age life investment, asset management, financing and so on.
　　Eight elderly, community home services company. This company provides services for the elderly, cater to the elderly in the family needs of their children to school, the shortage of work, in general such as the elderly life needed a clean, showers, shopping, cooking cooking, medicine, escorts the doctor, study (newspaper) family services, letters, chat, and so on, and the ill persons (elderly) care and emergency treatment.
Compared with developed countries, China aging industry can only be said to be in its infancy. China’s ageing commodities mainly dominated by elderly health nutrition, other dedicated products development very little in the elderly.
　　It is understood that some attaches great importance to older persons in developed countries products market development. Manufacturers to meet the needs of older persons, try developing aging market in goods and services, from drugs to pet food, home security systems, automatic dispensing medication for elderly denture chewing gum, timers, and so is very popular with elderly people of all ages.
Can truly develop aging industry, depending on the consumption of the elderly. Experts believe that increase protection levels and income levels of older people is essential, poverty will not be developing aging industry. State through policy change, increase the welfare of the elderly, improve the level of old-age security of older persons, is developing aging industry consumer base.
It is understood that some of China’s endowment insurance insurance companies turn this opportunity, developing a variety of insurance varieties suitable for the elderly. Held in Beijing in “2005 forecasts, analysis of China’s financial situation and looking forward to the annual meeting of the expert” on the Thai life insurance Co Ltd President Zeng Dong seep through believes that improving endowment insurance system, boot in young people to begin in rhythm when the savings and investment, to protect their own wealth to enjoy in his later years, so as to assist Governments in establishing a sound personal financial security system.
Had winter seep through think, China construction harmonious social faced was serious of “421″ family problem (is pair couples to bear maintenance four bit elderly, and a children of family burden problem), solution programme need from multifaceted start, while need Government actively to reform and perfect endowment insurance system, on the, domestic insurance enterprise also to carried out mutual aid sexual of activities, provides set science reasonable of “longevity social of insurance of survival” solution programme. Winter seep through that “insurance companies have the responsibility and obligation to provide appropriate protection to consumers, investment products, but is currently the most urgent problems, first is to strengthen people’s ‘ long-term savings investments ‘ perceptions and understanding of the significance. ”
Experts and scholars think, how to solve the “rich old” issues, ensure future longevity of social harmonious development in China, commercial insurance, particularly those who advocate long-term protection and investment financing idea insurance product, will no doubt bear some historical mission. It is understood that the ruitairenshou since its inception in January 2004, has been advocating the establishment of long-term personal financial security system of financial management concepts, ruitai foreign parties – Sweden Scandinavian Asia Insurance Group in the world, as advocated in the “long-term savings and investment” concept, in the past decades, to help people build their personal economic security system has been playing an important role in promoting.
China aging industry currently is in its infancy, seductive has not formed on the business of consumer markets, and aging industry is faced with the vulnerable groups of older persons, with some aspects of social welfare nature. Therefore, the experts suggested that in the initial stages, should establish some preferential support policies of State and Government, promote the development of aging industry. Meanwhile, combined with the fact their counterparts in the developed system, business conventions, including market access management industry standard internal unity.
Experts suggested that in future not only to increase the intensity of ageing product and service information, but also to expand the field of ageing publicity range of products and services, and actively guide update consumer attitudes of older persons, expanding the consumer market in the total market share in the elderly. In addition, the introduction of market mechanisms in order to further promote the development of aging industry, such as old-age home care services, older products, older apartment building is a Sunrise with good market prospects.

Fiscal policy is by means of taxation and public expenditure to achieve a certain degree of economic and social development of such macroeconomic goals and long term financial strategy, are important means of government regulation of the economy. In China in 2005 to achieve a transition from active financial policy to a prudent fiscal policy. This article on the two kinds of financial analysis of the implementation of the policy background, role, and orientation of fiscal policies and measures on the future prospects.

　　Fiscal policy is by means of taxation and public expenditure to implement certain economic and social development of macroeconomic goals and long term financial strategy, are important means for Government to control the economy. According to the total amount of financial policies in adjusting national economic aspects of fiscal policy can be divided into the expansionary policy, policy of deflationary policy and neutral.

　　A country in certain phases of economic development which fiscal policies, according to the macroeconomic situation, discretion. Macro-economic operational variety, but generally speaking, that is three types. One type is aggregate supply is greater than the social needs of society, namely, “deflation” performance for the overall price decline. Deflation situation, should adopt an expansionary fiscal policy and expansionary monetary policy. The second type is a total social supply less than the total social demand, that “inflation”, characterized by rising prices. In this case, should adopt a tighter fiscal policy and a tightening of monetary policy. The third type is the basic balance between total supply and total social demand of society, but with contradictions in structure, coexistence of hot and cold, uneven. This time should adopt a prudent fiscal policy, that is not to do too much action on the total amount, but maintains pressure on the structure, strengthening the weak links, compression overheating investment in industry.

　　Since 1998 the implementation of the proactive fiscal policy in China, its essence is an expansionary fiscal policy. In 2005, according to China’s national situation and economic development of the situation at home and abroad, proceed from reality, China’s implementation of sound fiscal policy, in respect of both the financial implementation of the policy background, function as follows.

　　And positive financial policy

　　　1, carry out background

　　 Later in the mid 1990 of the 20th century, led directly to an outbreak of the Asian financial crisis in the international market demand, in turn evolve into a global recession. Resulted in overproduction of the universality of the world economy and deflation. As the country’s largest trade partner in Asia, the Asian financial crisis will undoubtedly have a significant impact on China’s economic operation. From the domestic economic situation at that time, prices continued to decline, economic growth rates have fallen, insufficient domestic investment demand and consumption, income growth slowed, unemployment increased pressure and poor demand led to China’s export sluggishness in the international market. Significantly reducing the role of exports on economic growth, which fully shows that China’s economy has entered a stage of development of deflation and recession. This never seen extremely complex economic situation, the CPC Central Committee and State Council judged the, decisively made the implementation of additional Treasury bonds in a timely manner, expanding domestic demand and increase the intensity of investment in infrastructure, stimulate consumption and expand exports as the main contents of the proactive financial policy, the main measures include: is the release of long-term construction bonds, driving the total investment in fixed assets. Second, adjusting tax policies stimulate demand growth. Third is the adjustment of income distribution policy, improvement of consumer psychological expectations. Four is the standard charging system, reduce the burden on society, facilitate the expansion of consumption. Five is to support the strategic readjustment of the national economy, promoting the reform of State-owned enterprises and industrial structure optimization.

　　 2, active role

　　Positive financial policy in place for almost seven years. , Regulating supply and demand in the promotion of economic growth and overcome the stagflation achieved marked results.

　　(1) promote economic steady development. Large-scale investment situation that not only effectively curb the decline in economic growth, and suppressing deflation. 1998-2004 bonds pull the construction funds for the average annual economic growth of 1. 5% per cent, GDP average annual growth of 8.56%, stable price levels overall.

　　 (2) optimizing the economic structure. Positive financial policies with a view to short-term demand management and the organic combination of long-term supply management, in addition to strengthening infrastructure, through Treasury direct measures such as investment, tax policy, develop high-tech industry, transforming traditional industries, support in line with key industries and focus on the development of the industrial structure of enterprise technological innovation, promoting economic restructuring and industrial upgrading.

　　(3) increase employment. For seven years, Treasury funds to support a large number of new projects and supporting construction of the project a total increase of job a 7 million-10 million, led to the development of related industries had a very good stimulus.

　　(4) promote the balanced development of regional economy. Tilting financial funds arrangements through Central and Western regions, such as the West to the East, returning farmland to forest and grassland in Qinghai-Tibet Railway, works, six small projects such as infrastructure construction and ecological construction, improving the business environment of investment in these areas, accelerating the pace of development in Central and Western regions, the economic and social development of East and West unbalanced degree of improvement in patterns.

　　In short, as a counter-cyclical macroeconomic policies, the proactive fiscal policy is basically appropriate, its relative balance of China’s economic and social development played a role not to be underestimated.

　　 3, negative effects

　　But positive financial policies is a macroscopic “counter-cyclical” action is a policy that applies to this stage of economic. From the second half of 2002, China’s economy began to come out of the shadows of deflation, showing a trend of accelerated development. 2003 national economy finally passed from the relative downturn to stabilize rising inflection point, GDP growth jumps to 9% above. Implementation of some of the negative effects of positive financial policy, there have been some noteworthy issues was mainly haphazard investment and low-level redundant construction in some industries and regions increased, monetary and credit growth, resource constraints on economic growth more and more obvious, and brought electricity, coal, oil, transport and supply of raw material tension.

　　Second, the steady financial policy

　　 1, carry out background

　　 Since the second half of 2003, China’s economy has started to come out of the shadows of deflation, rising stage entered a new cycle of economic growth. One is the level of economic growth close to potential. 2003 GDP growth 9.3%, 2004 growth, some trades emergence of bottlenecks or resource constraint, indicating that GDP growth close to potential output level. Second, prices tend to rise. 2003 consumer price and retail price index of commodities rose and 1.2%, respectively, 2004 rose and 3.9% respectively. Third, slowing the rise in unemployment rate. 2003 national urban employment increased 8.59 million, registered urban unemployment rate is 4.3%; 2004 released 9.8 million people jobs in cities and towns, urban registered unemployment rate was 4.2%, down 0.1% percentage points over the previous year. Four is there local overheating of investment. In 2003, fixed-asset investment growth rate faster than retail 17.6% percentage points higher. Investment rate rose to 42.3% of the year, more than in 2002 for 3.1%, close to the level of 1993 when serious overheating of the economy (investment ratio is 43. 5%). To this end, the State has adopted a series of measures, including monetary means (such as raising the deposit reserve rate and raising interest rates) and administrative means, to gradually control signs local overheating of the economy. Although the 2004 5 June under the influence of macro-control, fixed-asset investment growth rate decreased significantly, but in 2004 ~ October, fixed-asset investment growth and signs of a significant rebound rate, 31.4%, 27.9%, respectively. Economic cycle stage transformation has taken place in the national economy and local overheating situation occurs, if you continue to practice an active fiscal policy, is not conducive to rapid growth and controlling fixed asset investment to reduce inflationary pressures.

　　Meanwhile, out the deep-seated problems in the economic operation. A pattern of economic growth and resources and the environment constraint conflicts more acute. Currently China oil, and gas, and coal, and iron ore, and copper and aluminum, important mineral resources per capita reserves respectively equivalent world per capita level of 11%, and 4.5%, and 79%, and 42%, and 18% and 7.3%, especially 2003 China GDP accounted for world of 4%, but consumption accounted for world of proportion: oil for 7.4%, raw coal for 31%, iron ore stone for 30%, steel for 27%, alumina for 25%, cement for 40%, description promote economic growth way change has became macro-control of a item urgent task. Second, domestic economic and social structural contradiction is more prominent. Investment share of GDP excessive, contribution to GDP growth rate decline in consumer demand. In addition, the urban-rural income gap in China is still widening.

　　Despite the tremendous growth of fiscal revenue in recent years, but because of China financial payment reform costs continue to increase during the transitional period, support the economic development of the tasks are very heavy, and the need to strengthen macro-control, and accompanied by a positive fiscal policy and public risk is also increased, fiscal deficits and debt scale is increasing very fast.

　　Evidently, has completed its historical mission of positive fiscal policy, financial policy adjustment and transformation must be enforced.
2, feasibility

　　Prudent fiscal policy feasibility of implementing it. Table now:

　　(1) actively of financial policy implementation led has investment, and credit growth partial fast, structural of contradictions also increasingly highlight, thus thrown of inflation, is bound effect to macroeconomic of development, if continues to implementation this a policy, not only not conducive to control fixed assets investment of had fast growth, and easy to formation reverse regulation; not only not conducive to slowed inflation of trend, and easy to intensified investment and consumption imbalance degree, increased economic health run of risk and resistance, on this, continues to implementation actively of financial policy has outdated, should timely steering.

　　(2) seen from the urgency of avoiding risk, also need to speed up the adjustment of the existing financial policy. Actively of financial policy implementation, main is by Government a large number of issued Treasury bonds for Foundation construction investment and implementation of, while makes economic of growth had copies rely on Yu Treasury bonds of issued, on the, also makes Treasury bonds of scale more and more large, to currently weizhi, only long-term construction Treasury bonds Trojan amount on reached has 910 billion yuan of giant, and central financial debt dependency of partial high, economic in the accumulation has a large number of of or has liabilities, increased has financial run of pressure.

　　(3) implementation of the proactive fiscal policy, China’s economy has been largely out of the deflationary period, entered a period of new round of increases, significantly enhanced capacity of autonomous growth of the economy, there has been a lot of money in the surge, people invest gradually enhanced their awareness of, enough to ease because of reduced government investment and to economic fluctuations.

　　 3, target

　　Fiscal policy as an important means of macroeconomic regulation and control of the Government, the objective must be services subject to the General requirements of national economic macro-. Sound fiscal policy to subordinating itself to and serving the overall situation of reform and development and the overall situation of the Central macroeconomic regulation and control, it is necessary to prevent the signs of inflation continue to expand on the macro-, and also prevent deflationary trends appear again; it is necessary to firmly control the expansion of investment demand, efforts to expand consumer demand again; it is necessary to cool the overheated industries on investment and weak link in efforts to support economic and social development. Therefore, sound fiscal policies will help to prevent economic fluctuations, control inflation. Maintain steady economic growth.

　　 4, the main content

　　The main contents of prudent fiscal policy to sum up, is four sentences, 16 words: control deficit, promote reform, adjusting structure and revenue.

　　(1) control the deficit, is appropriate to reduce the central fiscal deficit, but not significantly narrow, moderately tight, re-delivery oriented signal, both to prevent signs of inflation continues to expand, also reappears to prevent deflationary trend, reflecting results strengthen and improve macro-control, consolidation and development of macro-control requirements.

　　(2) promoting reform, is changes main relies on Treasury bonds project funds pull economic growth of way, in accordance with the both based on current, and aimed long-term of principles, in continues to arrangements part Treasury bonds project investment, integration budget infrastructure investment, guarantee must central financial investment scale of Foundation Shang, appropriate adjusting reduction Treasury bonds project funds scale, free out more financial, for support reform and system innovation, for market main and economic development created a good, and fair and relative loose of fiscal and taxation environment, established conducive to economic independent growth and health development of long-term mechanism, reflected changes economic growth way of requirements.

　　(3)) adjustment structure, is in on total not big of adjustment and compression of Foundation Shang, further in accordance with the science development view and public financial of requirements, adjustment financial expenditures structure and bonds project funds into structure, difference treat, and has tenure pressure, and has promoting has controlled, on and economic about of, and directly for general competitive field, of “offside” inputs, to back out, and pressure down; on belonging to public financial areas of, involves financial “absence or not in place” of, as need strengthening of agricultural, and employment and social security, and environment and raised “and adjustment economic structure of requirements.

　　(4) to revenue, on the one hand, and in General on the basis of a without increasing taxes or tax cuts, tax by strictly to plug the gaps, collection of the collection, ensure the steady growth of fiscal revenue. Receivable collection itself is the macro-control. The other hand, strict budget control expenditure in particular the control of general expenditure growth, improving on the use of fiscal funds benefit exertion, great Kung Fu shows meet the requirements of macro-control and establishing economical society.

　　In short, according to China’s national situation and economic development of the situation at home and abroad, proceed from reality, Central determines the orientation of fiscal policies, make the implementation of sound fiscal policies in place of the proactive financial policy, this is an objective, natural, realistic scientific choices.

　　Third, the prospect

　　Currently, and for some time in the future, is promoting overall construction of well-off society and building harmonious society in China’s important stage. “25″ trend of China’s economy will remain at a high in the period. In this case, should not be implemented mainly to expansion of the proactive fiscal policy. But economic structural problems solved, especially agricultural, energy, transport, education, consumer services, ecological environmental protection and other fields of science and technology development, you also need to maintain a certain intensity of fiscal policy, especially finances to support reform, large pressure to pay for reform costs. Therefore, should not implement the overall tightening of fiscal policy. “25″ should continue to implement sound fiscal policies in the early period in particular. In order to achieve good results, address the following issues:

　　 1, establishing and perfecting rural social security system, the public health system, the compulsory education system.

　　 2, apply tax means circular economy on enterprise’s technological innovation, environmental protection, and other projects increase the intensity of tax support; to the waste of resources, environmental pollution, low-level duplicate construction projects of enterprises, such as heavy taxes.

　　 3, open areas for restricting the entry of private capital, actively encourages high-tech, environmental protection, private capital investment in tourism.

　　 4, the timely introduction of property tax, increase the scale of the local Government of economical and practical housing and control real estate speculation, alleviate the expenditure pressure on residents, social stability and increase spending in other areas.

　　 5, further promoting the reform of rural tax and grain circulation structural reform, perfect the grain direct subsidy policy, stable minimum grain purchasing policy, and firm control of agricultural means of production prices rise, continue to increase peasant income levels.

　　 6, changing the concept of urban employment, through training, the development of the tertiary industry, continue to guide the civil capital, attract foreign investment in industry, efforts to reduce unemployment rates, creating a harmonious social environment.